Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Carolyn C. Nagy,
Petitioner,
- v. -
The Inspector General.
DATE: March 11, 1992
Docket No. C-350
DECISION
On January 23, 1991, the Inspector General (I.G.) advised Petitioner that she
was being excluded from
participation in the Medicare and State health care programs for five years,
as a result of her conviction of
a criminal offense related to the delivery of an item or service under the Medicaid
program. 1/ Exclusions
after such a conviction are made mandatory by section 1128(a)(1) of the Social
Security Act (Act). Section
1128(c)(3)(B) of the Act provides that the minimum period of exclusion shall
not be less than five years.
Based on the record before me, I conclude that summary disposition is appropriate
on the issue of whether
the I.G. has the authority to exclude Petitioner pursuant to section 1128(a)(1)
of the Act, that Petitioner is
subject to the federal minimum mandatory provisions of sections 1128(a)(1) and
1128(c)(3)(B) of the Act,
and that Petitioner's exclusion for a minimum of five years is mandated by federal
law
BACKGROUND
By letter dated February 11, 1991, Petitioner requested a hearing to contest
the I.G.'s January 23, 1991
notice letter (Notice) excluding Petitioner from participation in the Medicare
and State health care
programs (such as Medicaid) for a period of five years. The case was assigned
to me for hearing and
decision.
During a March 19, 1991 prehearing conference, Petitioner stated that she was
not represented by counsel
and that she had no plans to retain counsel for this proceeding. During that
conference, counsel for the I.G.
indicated that he would file a motion for summary disposition. Thereafter, the
I.G. filed a motion for
summary disposition on all issues, accompanied by a supporting brief and six
exhibits. Petitioner filed a
handwritten letter in which she expressed the view that her exclusion was unfairly
punitive, and I accepted
this document as Petitioner's response to the I.G.'s motion for summary disposition.
On July 10, 1991, I issued a Ruling in which I admitted into evidence the six
exhibits submitted by the I.G.
in support of his motion for summary disposition (I.G. Exs. 1-6). I also concluded
that, even if I accept as
true all the facts asserted by the I.G., the I.G. was not entitled to summary
disposition in this case. I
therefore gave the I.G. the opportunity to file an amendment to his motion for
summary disposition
supported by additional evidence. The I.G. subsequently filed an amended motion
for summary
disposition accompanied by a supporting brief and two additional exhibits. Petitioner
did not respond to
the I.G.'s amended motion.
On November 15, 1991, I issued a second Ruling in which I admitted into evidence
the two additional
exhibits submitted by the I.G. in support of his amended motion for summary
disposition (I.G. Exs. 7 and
8). I also concluded that even if I accepted as true the additional facts asserted
by the I.G. in his amended
motion, these facts did not justify summary disposition in favor of the I.G.
Because it appeared that the
I.G. was in a position to supply those undisputed facts necessary to establish
a basis for summary
disposition, I allowed the I.G. another opportunity to renew his motion.
The I.G. subsequently renewed his motion for summary disposition, and he submitted
a brief and an
additional exhibit in support of this motion. This exhibit was accompanied by
the requisite declaration,
and Petitioner has not contested the authenticity or the truth of the contents
of this exhibit. I am admitting
this exhibit into evidence at this time as I.G. Ex. 9.
Petitioner responded by submitting a handwritten letter in which she asserted
that she did not harm any
patient under her care. Attached to her letter was a Consent Agreement Regarding
Probationary Status of
License issued by the Maine State Board of Nursing.
By letter dated February 4, 1992, I notified the parties that the Secretary
of the Department of Health and
Human Services (the Secretary) promulgated new regulations affecting exclusion
cases. I noted that the
regulations were effective on publication on January 29, 1992, and I supplied
Petitioner with a copy of the
regulations since she is appearing pro se in this proceeding. I also gave the
parties the opportunity to
submit comments on the issue of what, if any, effect these regulations might
have on the outcome of this
case.
ISSUES
The issues in this case are:
1. Whether Petitioner was "convicted" of a criminal offense within
the meaning of sections 1128(a)(1) and
1128(i) of the Act.
2. Whether Petitioner was convicted of a criminal offense "related to
the delivery of an item or service"
under the Medicaid Program within the meaning of section 1128(a)(1) of the Act.
3. Whether Petitioner is subject to the minimum mandatory five year exclusion
provisions of sections
1128(a)(1) and 1128(c)(3)(B) of the Act.
FINDINGS OF FACT AND CONCLUSIONS OF LAW 2/
1. Petitioner was employed as a licensed practical nurse at the Colonial Acres
Nursing Home on
November 6, 1989. I.G. Ex. 4, I.G. Ex. 5.
2. On November 6, 1989, Petitioner admitted to the Director of Nursing at Colonial
Acres Nursing Home
that she slit open capsules containing the drug Darvon, that she removed the
Darvon from the capsules, and
that she substituted it with another substance. I.G. Ex. 8.
3. The stolen drugs were intended to be administered to Eula Neal. I.G. Ex. 8.
4. Eula Neal was a Medicaid recipient on November 6, 1989, and her inpatient
stay at Colonial Acres
Nursing Home was covered by the Maine Medicaid program at the time Petitioner
stole the drugs intended
for Ms. Neal. I.G. Ex. 9, I.G. Ex. 7.
5. Pursuant to an Information dated January 31, 1990, Petitioner was charged
with the offense of "stealing
drugs". I.G. Ex. 5.
6. On January 31, 1990, Petitioner entered a plea of guilty to the offense of "stealing drugs". I.G. Ex. 6.
7. On January 31, 1990, the Superior Court in Penobscot County, Maine, adjudged
Petitioner guilty of the
offense of "stealing drugs" and entered a judgment of conviction against
Petitioner. I.G. Ex. 6.
8. Petitioner was "convicted" of a criminal offense, within the meaning of section 1128(i) of the Act.
9. Petitioner was convicted of a criminal offense "related to the delivery
of an item or service" under the
Medicaid program, within the meaning of section 1128(a)(1) of the Act.
10. The Secretary of the United States Department of Health and Human Services
delegated to the I.G. the
authority to determine, impose, and direct exclusions pursuant to section 1128
of the Act. 48 Fed. Reg.
21662 (May 13, 1983).
11. On January 23, 1991, the I.G. notified Petitioner of his determination
to exclude her for five years
pursuant to section 1128 of the Act.
12. The I.G. properly excluded Petitioner from participation in the Medicare
and Medicaid programs for a
period of five years, as required by sections 1128(a)(1) and 1128(c)(3)(B) of
the Act.
13. Neither the I.G. nor the Administrative Law Judge has the discretion or
authority to reduce the five
year minimum exclusion mandated by section 1128(c)(3)(B) of the Act.
14. There are no disputed material facts in this case, and the I.G. is entitled to summary disposition.
DISCUSSION
I. Petitioner Was "Convicted" Of A Criminal Offense As A Matter Of Federal Law.
Section 1128(a)(1) of the Act mandates an exclusion of:
Any individual or entity that has been convicted of a criminal offense related
to the delivery of an
item or service under . . . [Medicare] or
under . . . [Medicaid].
The first criterion that must be satisfied in order to establish that the I.G.
had the authority to exclude
Petitioner under section 1128(a)(1) is that Petitioner was convicted of a criminal
offense.
Neither party to this case disagrees that Petitioner was convicted of a criminal
offense within the meaning
of the Act. Section 1128(i)(3) of the Act defines the term "convicted"
of a criminal offense to include
those circumstances in which a plea of guilty by an individual has been accepted
by a federal, State or local
court. The undisputed facts establish that pursuant to an Information dated
January 31, 1990, Petitioner
was charged with the offense "stealing drugs". I.G. Ex. 5. On that
same day, Petitioner entered a plea of
guilty to that offense. Based on that plea, the Superior Court in Penobscot
County, Maine, adjudged
Petitioner guilty of the offense charged and entered a judgment of conviction
against Petitioner. I.G. Ex. 6.
Although Petitioner does not deny that she was convicted of a criminal offense,
she pointed out at the
prehearing conference that she did not have a jury trial. See March 27, 1991,
Prehearing Order. As I
stated in my July 10, 1991 Ruling, the fact that Petitioner was not convicted
after a trial on the merits is not
material to the issue of whether she was "convicted" of a criminal
offense within the meaning of sections
1128(i) and 1128(a)(1) of the Act. It is not Petitioner's guilt that has to
be determined, but rather the fact of
her conviction. Baron L. Curtis, DAB CR122 (1991). It is undisputed that Petitioner
pled guilty to the
criminal offense of stealing drugs and that the Superior Court in Penobscot
County, Maine, accepted that
plea. I therefore conclude that Petitioner was "convicted" within
the meaning of sections 1128(i) and
1128(a)(1) of the Act.
II. Petitioner Was Convicted Of A Criminal Offense "Related To The Delivery
Of An Item Or Service"
Under The Medicaid Program.
Having concluded that Petitioner was "convicted" of a criminal offense,
I must determine whether the
criminal offense which formed the basis for the conviction was "related
to the delivery of an item or
service" under the Medicaid program, within the meaning of section 1128(a)(1)
of the Act.
The name of the criminal offense which formed the basis of Petitioner's conviction
was "stealing drugs."
I.G. Ex. 5. This offense does not mention Medicare, Medicaid, or any health
care program, and on its face
there is no indication that it is related to the delivery or an item or service
under Medicare or Medicaid.
However, it is consistent with congressional intent to admit extrinsic evidence
concerning the facts upon
which the conviction was predicated in order to determine whether the statutory
criteria of section
1128(a)(1) have been satisfied. In construing the language "related to
the delivery of an item or service", I
stated in H. G. Blankenship, DAB CR42 (1989):
The test of whether a "conviction" is "related to" Medicaid
must be a common sense
determination based on all relevant facts as determined by the finder of fact,
not merely a narrow
examination of the language within the four corners of the final judgment and
order of the criminal trial
court.
DAB CR42 at 11. The question before me is whether Petitioner's criminal offense
is related to the delivery
of an item or service under Medicare or Medicaid, not whether Petitioner was
convicted under a criminal
statute expressly criminalizing fraud against Medicare or Medicaid. As I stated
in Blankenship:
[M]y task is to examine all relevant conduct to determine if there is a relationship
between the
judgment of conviction and the Medicaid program. Had Congress intended a different
result, it would have
used the phrase "conviction for" or conviction "restricted to"
instead of "related to". An examination of
whether a conviction is "related to" Medicaid necessarily involves
an inquiry into Petitioner's conduct.
DAB CR42 at 11. In this case, the I.G. submitted exhibit evidence showing that
on January 31, 1990, a
criminal Information was filed in the Superior Court in Penobscot County, Maine,
charging Petitioner with
the offense of "stealing drugs." The Information alleged that the
offense occurred on November 6, 1989.
In describing the underlying offense, the Information alleged that Petitioner
obtained "unauthorized
control" over a drug which was the property of Colonial Acres Nursing Home.
I.G. Ex. 5. Other evidence
submitted by the I.G. established that at the time of the offense, Petitioner
was employed as a licensed
practical nurse at Colonial Acres Nursing Home. I.G. Ex. 4. In addition, the
I.G. submitted a document
establishing that Colonial Acres Nursing Home was a Medicaid provider in the
State of Maine. I.G. Ex. 2.
The I.G. contended that Petitioner was convicted of a criminal offense related
to the delivery of an item or
service under Medicaid. In making this assertion, the I.G. relied heavily on
the fact that Petitioner's
conviction was based on actions committed in conjunction with her duties as
a licensed practical nurse at a
facility participating in the Maine Medicaid program. The I.G. argued that the
requisite relationship
between Petitioner's criminal offense and the delivery of a Medicaid item or
service may be found in the
fact that Petitioner was convicted of unlawfully stealing drugs intended for
patients at a nursing home
participating in Medicaid program.
In my July 10, 1992, Ruling, I found that these undisputed facts were insufficient
to establish the requisite
nexus between Petitioner's criminal offense and the delivery of a Medicaid item
or service. The fact that
Petitioner has been convicted of a crime committed in the course of her employment
at a participating
Medicaid facility does not prove that the criminal offense relates to the delivery
of an item or service under
Medicaid. The undisputed facts contained in the record at the time I issued
my July 10, 1992 Ruling did
not establish that any Medicaid items or services were involved with the offense.
I pointed out that it is
within the realm of reasonable possibility that the theft of drugs by Petitioner
had no impact on the
Medicaid program and I noted that an example of this would be the situation
where the stolen drugs were
intended for a patient who was not a Medicaid recipient. 3/
The I.G. subsequently filed an amended motion for summary disposition in which
he submitted additional
exhibit evidence in support of additional undisputed facts. A signed statement
made by the Director of
Nursing for Colonial Acres Nursing Home on November 8, 1989 described the circumstances
surrounding
the underlying offense in greater detail. According to this statement, on November
5, 1989, members of
the nursing staff at Colonial Acres Nursing Home discovered that capsules containing
the drug
propoxyphene (Darvon), which had been prescribed to four different patients,
had been slit at the bottom.
The Director of Nursing opened one of the slit capsules, tasted the white substance
contained in it, and
found it to be tasteless. She then opened a capsule which had not been slit,
and it had a bitter taste. On the
morning of November 6, 1989, the Director of Nursing discovered that six additional
capsules of Darvon
prescribed for one of the patients, Eula Neal, was slit at the bottom. Petitioner,
who had been on duty as a
nurse during the previous night shift, was confronted with the evidence that
day and she admitted that she
had stolen the drugs for back pain. I.G. Ex. 8.
The I.G. also submitted a statement, dated July 22, 1991, by an investigator
with the Office of the Attorney
General, which indicated that Eula Neal is a Medicaid recipient. The statement
indicated that Eula Neal
had been a resident of the Colonial Acres Nursing Home since August 1, 1988,
and that she had been on
Medicaid since then. I.G. Ex. 7.
It is apparent from the exhibits submitted by the I.G. that Petitioner pled
guilty to committing the criminal
offense of stealing the drug Darvon on November 6, 1989. It also apparent that
the name of the patient
who was supposed to receive the drug which was stolen on November 6, 1989 is
Eula Neal. In addition, it
is undisputed that Eula Neal was a Medicaid recipient at the time the criminal
offense occurred. On
November 15, 1991, I issued another Ruling, in which I found that these facts
were not sufficient to
demonstrate the required relationship between Petitioner's crime and the delivery
of a Medicaid item or
service.
In my November 15, 1991 Ruling, I stated that for the I.G. to prevail, it may
be necessary for the I.G. to
prove that the crime to which Petitioner pled guilty to committing involved
a Medicare beneficiary or
Medicaid recipient. However, proving that status alone will not in and of itself
be sufficient to prove that
the offense fell within section 1128(a)(1). The I.G. must still prove that there
were Medicare or Medicaid
items or services from which Petitioner's crime emanated. In this case, it is
undisputed that the affected
patient, Eula Neal, was eligible for Medicaid. However, the facts as adduced
by the I.G. do not establish
that Eula Neal was actually receiving Medicare or Medicaid items or services
which were related to
Petitioner's criminal offense.
The I.G. subsequently renewed his motion for summary disposition and attached
to that motion additional
exhibit evidence including a Maine Medical Assistance Program (Medicaid) Remittance
Statement. This
statement indicated that Colonial Acres Nursing Home had billed the Maine Medicaid
program in the
amount of $1,692.39 for Eula Neal's stay during the period from November 1,
1989 to November 30, 1989,
and that Medicaid allowed coverage in that amount. This Statement also showed
that $415.92 of this
amount was paid for by sources other than Medicaid and that Medicaid actually
paid Colonial Acres
Nursing Home $1,276.47 for Eula Neal's stay during this period, which included
the November 6, 1989
date on which the criminal offense occurred. I.G. Ex. 9. Since the offense which
formed the basis of
Petitioner's conviction occurred on November 6, 1989, this evidence establishes
that the offense occurred
during the course of Eula Neal's inpatient stay at the nursing home, which was
paid for by Medicaid.
Upon reviewing the I.G.'s evidence submitted subsequent to my November 15,
1991 Ruling, I find that the
I.G. has brought forward sufficient evidence to establish that Petitioner's
criminal offense was related to the
delivery of health care item or service under the Medicaid program within the
meaning of section
1128(a)(1) of the Act.
The Act does not define what it means to be "related to" the delivery
of an item or service under Medicare
or Medicaid. However, case law has consistently held that a criminal offense
falls within the reach of
section 1128(a)(1) of the Act where the delivery of an item or service is an
element in the chain of events
giving rise to the offense. For example, in Jack W. Greene, DAB 1078 (1989),
aff'd sub nom. Greene v.
Sullivan, 731 F. Supp. 835 and 838 (E.D. Tenn. 1990), an appellate panel of
the Departmental Appeals
Board held that a conviction for submission of a false Medicaid claim met the
statutory test established by
section 1128(a)(1) of the Act. In reaching this conclusion, the appellate panel
reasoned that:
the submission of a bill or claim for Medicaid reimbursement is the necessary
step, following the
delivery of the item or service, to bring the "item" within the purview
of the program.
DAB 1078 at 7. Under this analysis, the appellate panel reasoned that but for
the delivery of the Medicaid
item or service, a false bill for the item or service would not have been submitted.
Since the delivery of the
item or service is an element in the chain of events giving rise to the offense
of false billing, the billing
offense is "related to" the delivery of the Medicaid item or service.
Although the facts of the present case are not on all fours with the facts
of Greene, the rationale used by the
appellate panel in deciding that case applies here. The petitioner in Greene
was convicted of submitting
false Medicaid claims, while in this case Petitioner was convicted of stealing
drugs. However, in both
cases, the delivery of a Medicaid item or service is an element in the chain
of events giving rise to the
criminal offense. In this case, the undisputed facts establish that the stolen
drug was provided during the
course of an inpatient stay which was covered by Medicaid. While the record
does not establish that the
stolen drug itself was a Medicare item or service, I find that the record establishes
that Eula Neal's inpatient
stay at the time the drug was stolen was a Medicaid item or service. The administration
of necessary
medication is a direct consequence of Eula Neal's stay in the nursing home.
But for Eula Neal's stay in the
nursing home, the stolen drug would not have been prescribed to her. The stolen
drug which formed the
basis of Petitioner's conviction was provided during the course of an inpatient
stay which was a Medicaid
item or service. Since Petitioner's nursing home stay is an element in the chain
of events giving rise to the
offense of the theft of drugs, it satisfies the rationale enunciated by Greene.
The common material element
in Greene and in this case is that the criminal offenses arose from the delivery
of an identifiable Medicaid
item or service. In this case, the identifiable Medicaid item or service was
Eula Neal's inpatient stay.
A Board appellate panel also has held that a conviction of a criminal offense
meets the statutory
requirements of section 1128(a)(1) of the Act where the unlawful conduct can
be shown to affect an
identifiable Medicare or Medicaid item or service or to affect reimbursement
for such an item or service.
DeWayne Franzen, DAB 1165 (1990). In this case, the identifiable Medicaid item
or service, Eula Neal's
inpatient stay, was affected by the theft of a drug intended for her during
the course of that stay. It is
reasonable to infer that the stolen drug was supposed to be administered to
Eula Neal because she had a
medical need for it. Petitioner's theft of this drug made it impossible to deliver
a necessary medication as
directed. In addition, the evidence of record shows that not only did Petitioner
steal the drug, but she
substituted a non-palliative substance for the stolen drug. This meant that
Eula Neal would be provided a
substance that was not consistent with the prescribing physician's orders. Petitioner's
actions caused her to
breach her duty to administer drugs as prescribed to a Medicaid recipient under
her care during the course
of the recipient's stay in the nursing home.
Petitioner contends that the evidence fails to establish that her offense resulted
in any actual harm to a
Medicaid recipient. While it is true that there is no evidence that Petitioner's
criminal offense resulted in
actual harm to Eula Neal, this does not derogate from the conclusion that the
offense was "related to" the
delivery of an item or service under the Medicaid program. Medication is prescribed
to patients for
medical reasons, and the failure to administer medication as prescribed places
the health and safety of a
patient in jeopardy. Petitioner's actions interfered with Eula Neal's expectation
that she would receive
competent, dependable, medical care during the course of her Medicaid-covered
stay at the nursing home.
Petitioner's offenses affected the delivery of an identifiable Medicaid item
or service, even though no
actual harm to a Medicaid recipient has been demonstrated.
In view of the foregoing, I conclude that Petitioner's crime is a criminal
offense "related to the delivery of
an item or service" under the Medicaid program within the meaning of section
1128(a)(1) of the Act. This
result fits squarely within the rationale for both the Greene and Franzen cases.
III. A Five Year Exclusion Is Required In This Case.
Sections 1128(a)(1) and 1128(c)(3)(B) of the Act require the I.G. to exclude
individuals and entities from
the Medicare and Medicaid programs for a minimum period of five years, when
such individuals have been
"convicted" of a criminal offense "related to the delivery of
an item or service" under the Medicare or
Medicaid programs, within the meaning of section 1128(a)(1) of the Act.
Since Petitioner was "convicted" of a criminal offense and it was
"related to the delivery of an item or
service" under the Medicaid program within the meaning of section 1128(a)(1)
and (i) of the Act, the I.G.
was required by section 1128(c)(3)(B) of the Act to exclude Petitioner for a
minimum of five years.
Neither the I.G. nor the Administrative Law Judge has discretion to reduce the
mandatory minimum five
year period of exclusion. Charles W. Wheeler and Joan K. Todd, DAB 1123 (1990).
4/
IV. Summary Disposition Is Appropriate In This Case.
The issue of whether the I.G. had the authority to exclude Petitioner under
section 1128(a)(1) is a legal
issue. I have concluded as a matter of law that Petitioner was properly excluded
and that the length of her
exclusion is mandated by law. There are no genuine issues of material fact which
would require the
submission of additional evidence, and there is no need for an evidentiary hearing
in this case.
Accordingly, the I.G. is entitled to summary disposition as a matter of law.
Charles W. Wheeler and Joan
K. Todd, DAB 1123 (1990).
CONCLUSION
Based on the undisputed material facts and the law, I conclude that the I.G.'s
determination to exclude
Petitioner from participation in Medicare, and to direct her exclusion from
Medicaid, for five years was
mandated by law. Therefore, I sustain the five-year exclusion imposed and directed
against Petitioner.
Charles E. Stratton
Administrative Law Judge
1. "State health care program" is defined by section 1128(h) of the
Social Security Act to cover three
types of federally financed health care programs, including Medicaid. I use
the term "Medicaid" to
represent all State health care programs from which Petitioner was excluded.
2. Some of my statements in the sections preceding these formal findings and
conclusions are also
findings of fact and conclusions of law. To the extent that they are not repeated
here, they were not in
controversy.
3. The I.G. also relied on a report completed by a special investigator for
the Maine Medicaid Fraud
Control Unit, which states that Petitioner's criminal offense resulted in a
"nominal" dollar impact on the
Medicaid program, to support his assertion that Petitioner's offense was program-related.
I.G. Ex. 4. In
my July 10, 1991 Ruling, I found that this statement alone, without a more complete
description of the
impact Petitioner's offense had on Medicaid, is insufficient to establish that
Petitioner's criminal offense
affected the Medicaid program.
4. In any event, the withholding of medication from a nursing home patient
is a serious and alarming
offense warranting a lengthy exclusion.